![]() Sigma-Aldrich Corporation Q1 2012 Earnings Review & Outlook • Enabling Science to Improve the Quality of Life sigma-aldrich.com Exhibit 99.2 |
![]() 2 2 Cautionary Statements Our presentation today may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve risk and uncertainty, including financial, business environment and projections, and related to matters that are not historical facts. Such statements are preceded by, followed by or include the words “believes,” “can,” “expects,” “plans,” “anticipates,” “should,” “enhances,” “estimates,” “forecasts,” “will” or similar expressions. Additionally, this presentation contains forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including, without limitation, statements with respect to Sigma-Aldrich Corporation’s (the “Company,” “we,” “us” or “our”) expectations, goals, beliefs, intentions, outlook, plans and the like regarding future sales, earnings, free cash flow, share repurchases, acquisitions and other matters. These statements are based on assumptions regarding the Company operations, investments and acquisitions and conditions in the market the Company serves. The Company believes these assumptions are reasonable and well founded. The statements in this presentation are subject to risks and uncertainties, including, among others, certain economic, political and technological factors. Actual results could differ materially from those stated or implied in this presentation, due to, but not limited to, such factors as (1) global economic conditions, (2) changes in pricing and the competitive environment and the global demand for the Company’s products, (3) fluctuations in foreign currency exchange rates, (4) changes in research funding and the success of research and development activities, (5) failure of planned sales initiatives in our Research and SAFC business units, (6) dependence on uninterrupted manufacturing operations and global supply chain, (7) changes in the regulatory environment in which the Company operates, (8) changes in worldwide tax rates or tax benefits from domestic and international operations, including the matters described in Note 10 – Income Taxes to the Company’s Consolidated Financial Statements included in Item 8, Part II in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “10-K”), (9) exposure to litigation including product liability claims, (10) the ability to maintain adequate quality standards, (11) reliance on third party package delivery services, (12) an unanticipated increase in interest rates, (13) other changes in the business environment in which the Company operates, (14) the outcome of the outstanding matters described in Note 11 – Contingent Liabilities and Commitments, to the Company’s consolidated financial statements included in Item 8, Part II in the 10-K and (15) acquisitions or divestitures of businesses. A further discussion of the Company’s risk factors can be found in Item 1A of Part I of the 10-K. The Company does not undertake any obligation to update these forward-looking statements. • With over 60 percent of sales denominated in currencies other than the U.S. dollar, management uses currency adjusted growth, and believes it is useful to investors, to judge the Company’s local currency performance. Organic sales growth data presented herein excludes currency impacts, and where indicated, acquisition impacts. The Company calculates the impact of changes in foreign currency exchange rates by multiplying current period activity by the difference between current period exchange rates and prior period exchange rates; the result is the defined impact of “changes in foreign currency exchange rates” or “changes in FX.” While we are able to report currency impacts after the fact, we are unable to estimate changes that may occur later in 2012 to applicable exchange rates. Any significant changes in currency exchange rates would likely have a significant impact on our reported growth rates due to the volume of our sales denominated in foreign currencies. • Management also uses the following non-GAAP measures to judge its performance and ability to pursue opportunities that enhance shareholder value: adjusted net income and EPS; adjusted operating income margin (reconciled on Slide 14); and free cash flow (provided on Slide 17). Due to the uncertain timing of future restructuring and other special charges we are unable to include these charges in the 2012 diluted adjusted EPS forecast or provide reconciliation to the corresponding GAAP measures. Management believes this non-GAAP information is useful to investors as well. Reconciliations of GAAP to non-GAAP information are included in the Company’s April 24, 2012 earnings release posted on its website, www.sigma-aldrich.com, and in the Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures beginning on Slide 12. |
![]() 3 1st Quarter 2012 Financial Results ($ in millions, except per share amounts) 3 YEAR-OVER-YEAR Sales of $665 Million Increase 5% Over Last Year Sales and Operating Income New Quarterly Highs As Reported Q1 2012 As Reported Excluding Special Items Operating Income $ 172 3% 4% Net Income $ 117 2% 4% Diluted EPS $0.96 1% 5% Free Cash Flow $ 112 16% Q1 2012 As Reported Excluding Currency and Acquisition Impacts Sales $ 665 5% 3% YEAR-OVER-YEAR (1) (1) See Slide 17 for Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (2) Special items include one-time restructuring charges, acquisition related transaction costs and tax benefit item. (2) |
![]() 4 4 2012 Sales Growth RESEARCH 70% 30% SAFC 4% 1% 3% Research SAFC Total Company Organic* Reported 4% 9% 5% Q1 2012 / Q1 2011 Sales Mix (QTD) *See Slide 16 for Reconciliation of Reported Sales Growth to Adjusted (Organic) Sales Growth. 2% 9% 4% Acquisitions Organic Sales Growth in Line with Expectations |
![]() 5 5 Q1 2012 Sales Performance Highlight Innovation Reported Organic (1) • Analytical, Biology, Materials Science Sales Growth (2) 4-8% 3-9% Geographic Growth • North America 5% 1% • Europe 1% 2% • Asia Pacific/Latin America 13% 9% • Focus Markets – India, China, Brazil 21% 13% eCommerce Sales • Increase in sales through channel 8% (2) Varies for individual product lines. (1) Adjusted for currency and acquisitions. See Slides 15 & 16 for Reconciliation of Reported Sales Growth to Adjusted (Organic) Sales 00 Growth. Initiatives Collectively on Track |
![]() 6 26.6% 6 Margin Analysis Adjusted Operating Margin, Excluding the Impact of Acquisitions, Improved PERCENTAGE OF SALES Q1 2012 Adjusted Operating Income Margin – Q1 2011 26.9% Adjusted Operating Income Before Acquisitions (1) (1) (1) Adjusted Operating Margin excludes one-time acquisition transaction costs and restructuring charges. See Slide 14 for Reconciliation of 00Reported Operating Income Margin to Adjusted Operating Income Margin. Currency 0.2% SG&A / R&D (0.2%) Acquisitions (1.0%) Volume / Price / Mix 0.7% 27.6% Adjusted Operating Income Margin – Q1 2012 |
![]() 7 7 Free Cash Flow (in millions) 2012 $ 117 32 (56) 51 144 (32) $ 112 Net Income Free Cash Flow Net Cash Provided by Operating Activities Less Capital Expenditures Other Changes in Performance Working Capital* Depreciation & Amortization 2011 *Accounts Receivable + Inventory – Accounts Payable 3 Months Ended March 31 Working Capital and Capital Expenditures Increase to Support Sales Growth and Improve Operational Efficiency $ 119 26 (45) 51 151 (18) $ 133 |
![]() 8 8 • Record quarter for sales and earnings • Acquisition of BioReliance and Research Organics • New Capacity First Quarter 2012 Highlights Q1 Results Meet Expectations; Acquisition and New Capacity to Boost Sales Growth |
![]() 9 • Macro-economic Pressures • Industry Consolidation • Outsourcing in Pharmaceutical • Emerging Market Growth • Shift to Biologics • Applied Markets Growth Key Trends Drive Opportunities Sigma-Aldrich Positioned to Capitalize on These Market Trends |
![]() 10 10 2012 Guidance Organic Sales Growth 1st Half Mid Single-digit 2nd Half Full Year Low Double-digits Low to Mid Single-digit Research SAFC Mid Single-digit Organic Sales Growth and EPS Outlook Reaffirmed Low to Mid Single-digit Diluted Adjusted EPS* Free Cash Flow $ 3.90 to $ 4.05 Approximately $425M *Excludes any new restructuring charges, transaction costs associated with acquisitions and other one time charges. |
![]() 11 11 QUESTIONS? Sigma-Aldrich Corporation Q1 2012 Earnings Review |
![]() 12 Appendix Reconciliation of GAAP to Non-GAAP Financial Measures |
![]() 13 Reconciliation of Reported Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted Earnings Per Share (Unaudited) 2012 2011 2012 2011 Reported net income 117 $ 119 $ 0.96 $ 0.97 $ Acquisition transaction costs 4 - 0.03 - Restructuring costs - 2 - 0.01 Tax Benefit - (5) - (0.04) Adjusted net income 121 $ 116 $ 0.99 $ 0.94 $ Three Months Ended Three Months Ended March 31, March 31, Net Income Diluted Earnings (in millions) Per Share |
![]() 14 Reconciliation of Reported Operating Income to Adjusted Operating Income (Unaudited) 2012 2011 Reported operating income 172 $ 167 $ Acquisition transaction costs 5 - Restructuring costs - 3 Adjusted operating income 177 $ 170 $ 2012 2011 Reported operating income margin 25.9% 26.4% Acquisition transaction costs 0.7% - Restructuring costs - 0.5% Adjusted operating income margin 26.6% 26.9% Three Months Ended March 31, Three Months Ended March 31, |
![]() 15 Reconciliation of Reported Sales Growth to Adjusted (Organic) Sales Growth (Unaudited) Three Months Ended March 31, 2012 Reported FX Impact Acquisitions Organic • Analytical, Biology, Materials Science Sales Growth Geographic Growth • North America • Europe • Asia Pacific/Latin America • Focus Markets – India, China, Brazil *Varies for individual product areas 4 - 8% * (1) - (2)% * 0 - 2% * 3 - 9% * 5% - % 4% 1% 1% (4)% 3% 2% 13% - % 4% 9% 21% (3)% 11% 13% |
![]() 16 Reconciliation of Reported Sales Growth to Adjusted (Organic) Sales Growth (Unaudited) Sales Growth by Business Unit Currency Acquisition Adjusted Reported Benefit Benefit (Organic) Research Chemicals 4% (2%) 2% 4% SAFC 9% (1%) 9% 1% Total Customer Sales 5% (2%) 4% 3% Three Months Ended March 31, 2012 |
![]() 17 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited) In millions 2012 2011 Net cash provided by operating activities 144 $ 151 $ Less: Capital expenditures (32) (18) Free cash flow 112 $ 133 $ March 31, Three Months Ended |